Accounts receivable (gross)InventoryTotal current assetsTotal current liabilitiesCredit salesCost of goods soldCurrent ratioReceivables turnoverInventory turnover20211.000.000$850,000 $750,000 $650,0001.020,000980,000840,0002,100,000 2,000,000 1,700,0001.100.000 1,250,0006.420.000 6.240,000 5.430.0004,540,000 4,550,0003,950,000(b) Based on (1) current ratio, (2) receivables turnover ratio, and (3) inventory turnover ratio, what conclusion(s) can be drawn aboutthe company's liquidity?202121:120208.0 times4.5 times2020201918:18.9 times5.0 times.

Name: Accounts receivable (gross)InventoryTotal current assetsTotal current
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Description: Accounts receivable (gross)InventoryTotal current assetsTotal current liabilitiesCredit salesCost of goods soldCurrent ratioReceivables turnoverInventory turnover20211.000.000$850,000 $750,000 $650,0001.020,000980,000840,0002,100,000 2,000,000 1,700

Receivable or debtor turnover ratio is calculated by dividing turnover with the average receivable.…

Business

Accounting

Accounts receivable (gross) Inventory Total current assets Total current liabilities Credit sales Cost of goods sold Current ratio 2021 $850,000 Receivables turnover Inventory turnover 1.020.000 2020 $750,000 980.000 2020 2019 2.100.000 2,000,000 1,700,000 1,000,000 1.100.000 1.250,000 6.420.000 6.240,000 5.430.000 4,540,000 4,550,000 (b) Based on (1) current ratio, (2) receivables turnover ratio, and (3) inventory turnover ratio, what conclusionis) can be drawn about the company's liquidity? 2021 21 1 8.0 times 8.9 times 4.5 times 5.0 times $650,000 18:1 840,000 3,950,000

Accounts receivable (gross) Inventory Total current assets Total current liabilities Credit sales Cost of goods sold Current ratio 2021 $850,000 Receivables turnover Inventory turnover 1.020.000 2020 $750,000 980.000 2020 2019 2.100.000 2,000,000 1,700,000 1,000,000 1.100.000 1.250,000 6.420.000 6.240,000 5.430.000 4,540,000 4,550,000 (b) Based on (1) current ratio, (2) receivables turnover ratio, and (3) inventory turnover ratio, what conclusionis) can be drawn about the company's liquidity? 2021 21 1 8.0 times 8.9 times 4.5 times 5.0 times $650,000 18:1 840,000 3,950,000

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 5MC

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